Scaling-up innovative sanitation business models: Lessons from Lusaka

Scale up of innovative pit-emptying services in Lusaka

In 2011, the Foundation provided a £1.5m grant to Water & Sanitation for the Urban Poor (WSUP) to improve WASH services in Lusaka, Zambia.

A key component of WSUP’s programme was supporting the utility—Lusaka Water and Sewerage Company (LWSC)—to create a new pit emptying service, targeted specifically at low-income residents.

The service, launched in 2012, is operated by community organisations (known as Water Trusts) under a delegated management contract with LWSC.

Customers pay to have their pit emptied, and the waste is transported to a treatment facility where it is processed and safely disposed of—or resold as soil conditioner and fertiliser.

As well as financing this work, the Foundation provided non-financial support from a marketing agency, which helped WSUP develop the value proposition for customers and improve the user experience.

This new approach led to direct improvements for low-income residents, with more than 50,000 people benefiting from the service today.

Most importantly, this project, which was initially piloted in just two areas of Lusaka, is now finding a pathway to scale under the new Lusaka Sanitation Programme.

This $375 million investment programme, led by LWSC and funded by four international donors, will allocate some funding towards expanding this pit emptying model, as well as other faecal sludge management services across the city.

LWSC’s aim is that this, plus plans to develop new on-site sanitation infrastructure, such as septic tanks and toilets, will eventually reach all 1.5 million low-income residents living in Lusaka.

Lessons learned

WSUP’s experience in Lusaka is particularly interesting because it provides a tangible example of two key things.

First, how service delivery models based on partnership between operators and utilities can work in practice. And secondly how, once these models are operating at a reasonable scale, they can trigger utilities to scale up services at a city-wide level.

While the pit-emptying model itself still needs more work to achieve full financial sustainability, WSUP has successfully helped the utility recognise the importance of on-site sanitation, and develop the models that now enables it to attract additional finance and invest in city-wide faecal sludge management service provision.

Links with our mission and approach to funding

This project is also a good illustration of how we, as a Foundation, aim to support enterprise development and advance the water and sanitation sector.

As a relatively small family foundation, we do not have the funding—nor the mandate—to provide city-wide services.

Instead, what we do have is flexible funding and a high tolerance for risk that allows us to support early stage enterprises that have potential for significant impact.

The example of the Lusaka pit-emptying businesses demonstrates how we seek to support these new promising enterprises in two complementary ways:

• Risk capital that is flexible, patient and that can respond quickly to the evolving needs of the business;
• Non-financial support and business expertise to help partners refine their strategy and value proposition. This can be time of staff or experts in the sector, in areas such as business development, financial modelling, or sales and marketing.

Our aim is to support enterprises to a point where they can attract scale finance—whether that’s from public or commercial sources, or from other private donors.

We believe that what is most important is helping these ventures identify what funding is right for them given their business models, and help them achieve their goals.

Though we are only a small part of the puzzle, our support to WSUP’s work in Lusaka is an encouraging example of how we can contribute to LWSC’s journey towards city-wide sanitation. We are excited about the developments to come, and the high-quality services that are being expanded to all low-income residents in the city.